Thursday, May 26, 2011

California's Legislative Analyst's office is putting itself smack in the middle of a political battle . . . on purpose!

The CA LAO is suggesting that the state legislature refuse to appropriate matching funds for California's new High Speed Rail unless the ground breaking is in either SF or LA. To get Federal funds for this project, the state must provide matching funds. The LAO insists that the California High Speed Rail Authority has overstated ridership, thus profit, and understated the construction costs. If the LAO persists, and if the CA Legislature follows this advice, CA will loose all it's Federal money and in effect, the rail project will be dead, despite the strong support of CA voters and the Obama Administration.

The LAO suggests that the authority renegotiate start plans with the Feds, but the Feds have made it clear that starting the project anywhere but Central Valley will result in no Federal monies, period. The project deadlines must be met or the funding dissolves.

Now, I don't think the LAO is trying be partisan. But the media I've heard and read today makes it seem like the LAO is overstepping, or at least being too pushy. Assembly woman (D), Cathleen Galgiani is quoted in the Fresno Bee article as saying, "The LAO wants the Legislature to set criteria for choosing where to start building, but legislators already did that when they put Prop. 1A on the ballot. What this looks like is that perhaps the LAO doesn't like the outcome, so they want another legislature to change the rules to affect a different outcome." If the LAO is overstepping, it needs to be put in its place.

So the plans for ground breaking are all set. CA rail authority planners have worked closely with the Federal Government to get started. The Feds have insisted that the first branch to be built be the Central Valley portion from south of Merced to Bakersfield. See map below.

Actually,I would prefer to see the track laid between Sacramento and Fresno. It would be more expensive, but it would serve more people immediately. So in some sense the LAO's objection is valid. That said, it isn't worth it if it means killing the whole project. Talk about snatching defeat from the jaws of victory! There are a couple of good reasons why the Merced-Bakersfield plan makes sense. 1)The Valley is under-served in terms of public transportation. Many commuters to the Bay Area and LA live in the Central Valley where property is more affordable. 2) The Bay Area has BART, and it is heavily used. It reaches inland to Pleasanton. LA has public trans as well. The main highway down the Vally (HW 99) is overused and in pretty bad shape. I-5 carries a lot of traffic as well, but is also in varying degrees of disrepair. 3)The Valley needs the jobs & development. This part of the Valley is the poorest of the poor. 4)There is strong political support for it in the Valley and less environmental resistance. The Valley has space and the land is much cheaper than in the LA or SF areas.

The LAO's report makes some fair arguments about overall costs of the project. But we are talking about a public good. And public goods, like the post office, shouldn't be expected to turn a profit. We need to get used to this idea. Some things are purely about services and the economic growth that those services make possible. Truth be told, LA and the Bay Area are nearly built out. And if CA wants to draw big companies, the only place left is the Central Valley.

CA should not go the route that Florida went and turn away federal matching funds. This project is too important.

12 comments:

I haven't followed this story at all so I don't claim to understand the nuances. And I certainly agree with US West that if the Feds are imposing conditions, California should just put up with them if that's what it takes to get the project (assuming they want it). I also don't know exactly what the anticipated ridership numbers look like so I'm assuming, perhaps incorrectly, that ridership will be driven largely by population density.

All that said, it seems to me that this all boils down to different views of what the high speed rail project is for.

If it's to provide a substitute for intrastate air travel, then it should link the major cities, LA, SJ, SD, and SF and largely avoid the Central Valley. In that case it seems reasonable that one would expect usage to be highest the more of these cities are connected sooner in the process. Starting it in the relatively less populated middle of the route seems a little odd in this respect.

If the project's main goal is to provide an alternative to Hwy 99 and I5, then again, it seems reasonable to link it sooner rather than later to the biggest population centers along those corridors (Sacramento, LA). The idea would be to start at the destination we think will be the most popular and work your up the line. That might mean starting it in Sacramento but again, I don't see the advantage in starting it in the middle, less populated stretch of the proposed route.

If the primary goal is to provide jobs to the Central Valley regardless of how much the high speed rail route will actually be used, then I have a real problem with the project in principle. There are plenty of public works projects that might be better uses of public funds in that part of the state (repairing/improving existing road networks or building a more efficient water distribution/management system for the region for example). But if that's the goal of the project then go ahead and build a high speed rail connection between Modesto and Fresno don't worry about ridership.

To conclude, I strongly agree with US West's main point - that California should not look a gift horse in the mouth.

Well RBR, I think you bring up a good point about what the "purpose" is. If you go to the California High Speed Rail Authority website, you will see that all the purposes you mentioned are included.

The argument is NOT about whether to build high speed rail. The CA voters have made it clear that we want it. The argument is where to start the system. And that has really been decided by the CHSRA and the Feds. Ground breaking is scheduled for next year. So this LAO report comes at a very odd time, very late in the game. Late enough to screw things up if someone really wanted to. That is why I find it suspicious. It isn't a new topic. There has been all sorts of public comment, research, and ample opportunity since 2008 for the LAO to object. Basically, the planning is done. We are shovel ready.

What do you think, LTG?

Now the LAO report brings up several good points. 1) what happens if the state doesn't fund the project all the way through as intended? Will it be a white elephant? 2)Federal Funding isn't expected to continue throughout the life of the project. This is a problem with many of Obama's proposals. They are enough to get the ball rolling, but sustainment is another issue altogether.

Just for the record, the CHSRA website says that they expect to get about 5,300 boardings daily in Merced and 4,500 boardings daily in Fresno, 5,100 in Bakersfield once the entire system is operational. The rail would bout 173 miles long.

I am not sure how they came to these numbers and I am not sure how these numbers would change if they don't complete the system.

That said, neither Fresno nor Bakersfield are small towns. Fresno has over 1 million residents. Bakersfield has over 800,000. So regardless of what additional trunks are built, this system won't go to waste. This is called the "backbone" of the system and is dubbed the "Palmdale Route"

Population projections for the Antelope Valley where this train would pass is 1 million people by 2020 (When service is expected to start) and would provide easy links to future routes to Las Vegas.

Those seem like big numbers. It sounds like the high speed rail system is intended to avoid the biggest cites in the state. Odd.

I'm a little worried about assuming that the inland desert areas of California and Las Vegas are going to keep growing though. Water is already a problem and it's becoming worse - but that's probably a subject for another thread. What happens if the population of inland California and Southern Nevada drops?

This project though does seem more reasonable than the proposed high speed rail link between Chicago, Davenport/Bettendorf/Rock Island/Moline (aka "Quad Cities") and Iowa City. The Quad Cities have a population of a couple of hundred thousand. Iowa City has a population of perhaps one hundred thousand with another hundred and fifty thousand or so in nearby Cedar Rapids. But really, I can't imagine the kind of ridership numbers you are talking about for this Central Valley line manifesting themselves on this Chicago-Iowa link.

It's a shame that the best places to put high speed rail would be areas where reasonably large cities are close together. The Philladelphia-NYC-Boston corridor, Florida and the greater Ohio area would seem to be the best bets but the Republican governors are falling over themselves to reject the projects.

BTW, something you said in your original post strikes me as very strange. You said, "Truth be told, LA and the Bay Area are nearly built out. And if CA wants to draw big companies, the only place left is the Central Valley."

I can't think of any reason why one would declare a city "built out" or incapable of attracting new economic growth. After all there are many cities that are far larger than either the LA or Bay Area metropolitan areas (New York, Tokyo, and Seoul come to mind).

One last thought... It could be that the LAO is firing a warning shot at Central Valley politicians (who are mostly conservative Republicans). It could be that they are trying to make Republicans who would otherwise be complaining about "socialism" and "wasted government money" standing up and publicly demand a high speed rail connection between Modesto, Fresno and Bakersfield.

RBR said:" It sounds like the high speed rail system is intended to avoid the biggest cites in the state. Odd. "

While the Valley has large rural areas, it has sizable population centers both north and south. Sacramento has over half a million people, Stockton has 300 mil, Modesto over 200 mil. The commuting population from these areas is large. Because real estate is so pricey in the heavily populated metro areas (Bay Area and LA), people have moved inland in large numbers.The Census numbers, which I shared in a previous thread, show that the Central Valley, Merced County in particular, has had the largest population growth in the state- something like 20% on the last 10 years.

The rail line is intended to link San Francisco to LA and eventually San Diego through the Central Valley. So there is no intent to avoid the largest cities. Quite the contrary. But the argument is not that, it's where the backbone or the first leg should be built. This is as much an engineering decision as a a socio-economic decision. THe LAO isn't saying that the rail system shouldn't be built. He's arguing that it shouldn't start on the Palmdale route.

RBR questioned: "I can't think of any reason why one would declare a city "built out" or incapable of attracting new economic growth. "

I did not mean to imply that the large metro areas would be unable to attract economic growth. What I meant is that there is little physical space left in these areas to build new commercial buildings, especially sizable ones or homes. So if you have a business that requires a lot of land, it isn't going to be found in the Bay Area or LA. There is urban sprawl, however, the trend in California is to inhibit that. I point you to http://www.bloomberg.com/news/2011-03-08/california-no-longer-magnet-as-rate-of-population-growth-slows-in-census.html

RBR said: "I'm a little worried about assuming that the inland desert areas of California and Las Vegas are going to keep growing though. Water is already a problem and it's becoming worse ."

LA basin is a much more serious desert than the Valley. We have the Delta and several rivers that run through here. River rehabilitation is also starting in the Central Valley to improve water distribution. Many of our natural rivers were destroyed with the over building of reservoirs. If CA were to avoid development of its less water rich regions, then there'd be no California left.

We've pretty much pulled out of the drought that has persisted over the last 7 years. And water use is down in the Valley largely due to strong conservation measures. I would point out that statewide, water is a problem- even in the Bay Area. So if we used water as a reason to stop development, it would have to stop everywhere in the state. Water politics is a complex issue in CA. But it's raining pretty good as I type this.

As for your last thought, I don't think this is likely. The LAO by law is non partisan. And there are also many Bluedog Democrats from the Central Valley. Overall, CA conservatives of all stripes are much less so than those in other states. But I can't figure out if there is perhaps an agenda behind the sudden objection. Is there a special interest. It could just be coincidence and nothing more.

Bottom line is that CA has to start the project on time or it will loose Federal money. So any delay puts the entire project at risk.

I think you meant to say that Stockton et has 300 THOUSAND, not 300 MILLION. That's a good sized city, certainly. And I see from the demographic trends I looked at when you first posted, that Fresno and Bakersfield have about doubled in size since I first moved to California. But it doesn't change the fact that the overwhelming majority of the population of California is still concentrated along the coasts.

There may be water aplenty in the northern Central Valley but the southern end of it is dry. Also, I think you mean that LA metropolitian area is running out of water. Much of the basin itself has natural, local sources of water. West LA in particular uses mostly local water from it's own sources. It's the newer growth out in the "inland empire" and the San Fernando Valley. Big cities can and do grow UP not just out.

Back to the rail route. LAO clearly has a different view of what the rail line is for. If the issue is ridership, then it makes sense to question the central valley first decision. Especially if, as with so many other projects like this, it ends up never being fully meeting the expectations of the planners. Even if the Central Valley has grown a lot in the last 15 years - largely as part of the real estate bubble. That may indicate the rapid growth in those cities is not sustainable.

Another worry about future growth in these cities is their top employers. When I look up the top employers in Stockton and Fresno, I see mostly local government and hospitals. That's not a healthy economy. That's an indicator that, as US West points out, these are cities filled with commuters to other cities. And I doubt seriously that the largest share of the commuters are going from Stockton to Fresno and back. That's one argument in favor of the LAO's preference for starting this in the Bay Area or LA. It's better to build the route between Fresno and LA first or Stockton and San Jose, Oakland or SF first. At least that way, if (when?) the funding dries up before the project is completed, there will be a usable commuter link connecting the Central Valley to the much larger coast cities. But if the project funding fades away and all that's been done is a high speed rail link between Stockton and Fresno, then it's failure to meet the optimistic ridership numbers will be used as an argument against completing it or building more high speed rail links at all.

I presume the purpose of the requirement to start in the middle is to makke sure it gets finishd. Start at SF and it may never go down to LA all the way. Also it ensures the rail gets built first where least politically popular. I have no idea what the LAO is doing, but given that dems control sacto and the first leg will benefit gop territory, I see the hostility.

LTG, I understand your logic, but it assumes that the funding will be available in the future at some level. I think it's fair to assume it won't be. So what I fear (and perhaps what the LAO fears as well), is a high speed rail connection with no destination. I keep thinking of the Simpsons episode about the Monorail.

But all that said, I still agree with US West 100% that the state shouldn't muck around here. If the Feds want it to start in the Central Valley, so be it. A half finished rail line to medium sized bedroom communities is better than nothing at all and all California has to do to get that much is say "OK." Anything after that would be gravy.

No, RBR, I assume the opposite. I assume that funding won't be available in the future unless it's necessary to PREVENT the railway from becoming a road to nowhere. To prevent the pure waste. If the road is useful to start - say, SF to Sacramento - there will be very little incentive to send it further if money is tight.